Eminence submitted a comment letter on the joint notice of proposed rulemaking issued by FinCEN and the SEC to apply customer identification program obligations to investment advisers registered with the SEC and exempt reporting advisers.
Eminence’s recommendations the following to enhance the implementation and effectiveness of the proposed rule:
- Eminence supports the definitions of “account” in the Proposed Rule such that investors in private funds are not considered “customers” of Covered Advisers.
- With respect to the definition of “Account,” the definition should require a customer to have a formal relationship with a Covered Adviser to obtain investment advisory services, and Eminence supports excluding from the definition of “account” any accounts that are acquired through acquisition, merger, purchase of assets, or assumption of liabilities. The definition of “account” should not include products or services where a formal relationship for investment advisory services is not established.
- With respect to the definition of “Customer,” the definition should not apply to existing customer relationships, persons with authority or control over an account other than the customer, Covered Advisers, mutual funds, and other entities subject to significant regulatory oversight, or that present low risk of money laundering, such as closed-end funds and public pension plans.
- Eminence supports the ability of Covered Advisers to rely on other financial institutions for their CIP. The Final Rule should allow for reliance on subsidiaries of financial institutions subject to an AML program requirement where the subsidiary is subject to an enterprise-wide AML program that is designed to comply with the Bank Secrecy Act (“BSA”).
